States let adult kids stay on parents' insurance

The laws intended to boost access to coverage often have caveats. To stay on a parent's plan, young adults may have to be single or childless.

By Doug Trapp, AMNews staff. Sept. 3, 2007.

Washington -- At least 11 states have passed laws this year to reduce the number of uninsured residents by allowing the young and uninsured to remain on their parents' private health plans longer.

When the number of Americans without insurance is broken down by age, young adults 21 to 24 fare the worst. About one-third of them lack coverage, compared with about one-fifth of all adults, according to the Employee Benefit Research Institute.

"If you start by saying, 'Who's uninsured?' [then] this is a good place to start," said Alan Weil, executive director of the National Academy for State Health Policy.

Typically, young adults become ineligible for their parents' insurance at age 19, or later if they're in college. With many young people taking longer to establish their independence, states are requiring certain health plans to offer coverage to more young, single people.

So far about 26 states have increased the age limit for dependents, although many changes have strings attached. To qualify, young people may have to be single, without children, enrolled in college or perhaps financially reliant on their parents.

Allowing young adults to remain dependents during college is not new. But many recent expansions differ because they more often tie dependency to an age instead of a living or educational situation, said Judith Solomon, senior fellow at the nonpartisan Center on Budget and Policy Priorities.

These new laws have limits. States cannot regulate self-insured health plans, those in which typically large businesses and organizations pay employee claims out of their own coffers. Fifty-five percent of employees with health insurance have a self-insured plan, said Paul Fronstin, PhD, a senior research associate at the Employee Benefit Research Institute.